Exclusive: Nestle keeping pace with consumers

SOLON, OHIO — Keeping pace with changing consumer tastes has proved challenging for many packaged food companies, and Nestle USA is no exception. Today’s shoppers seek products perceived as natural and fresh, high in protein, gluten-free and free from artificial ingredients — attributes that had been relatively absent from the company’s portfolio until recently.

“What we’re seeing is consumers really do want nutritious products, but they’re not as focused on salts and fat as they were a few years ago,” said Sean Westcott, director of Nestle’s research and development center in Solon, Ohio, in an interview with Food Business News. “And what we see is health is becoming more complex.”

Sean Westcott, director of Nestle’s research and development center in Solon, Ohio.

Mr. Westcott said Nestle is up to the challenge. The company recently invested $50 million to build a new R.&D. center dedicated to its frozen and chilled foods businesses as part of ongoing efforts to innovate and renovate existing products in response to consumer demand. Earlier this year, Nestle announced plans to remove artificial flavors and colors from its chocolate candy products, which include such brands as Butterfinger and Baby Ruth, and reduce added sugar and remove artificial flavors and colors from Nesquik powdered formulas.

The company also committed to removing artificial flavors and reducing sodium in Hot Pockets and DiGiorno, Jack’s, Tombstone and California Pizza Kitchen’s frozen pizzas. But rather than highlight reduced sodium on the packaging, Nestle said messaging will focus on product attributes that resonate more strongly with today’s consumers.

“A lot of communication around low sodium or low fat can lead to perceptions of low taste,” Mr. Westcott said. “What we found is if we focus on what we’re doing with nutrition, health and wellness and on what the consumer values in the product — how we make the product creamier or crisper, how we make the flavor more impactful — those are the things consumers identify with, and often we can achieve the two things at the same time.

“A lot of the sodium is wasted in a product in the sense of taste because it’s bound up inside the actual matrix of the product, so we’re learning to put less salt overall in the product and put the salt where it has the most impact on taste, and then you get the balance. You reduce the sodium but still get a good taste.

“But I think when we communicate more about the culinary quality of the product, then we get a better response from the consumer.”

Sodium reduction figures into Nestle’s core mission to make healthier products, said John Carmichael, president of Nestle’s pizza division.

“Consumers who are interested in low saline or healthy saline levels will turn (the product) over, they’ll see it, and word of mouth will take off,” Mr. Carmichael said. “Our belief is more and more will seek it out because consumers will get more and more health conscious, and that’s the right thing to do, and we’ll support that.”

Nestle also recently unveiled a reboot of the Lean Cuisine brand, with the addition of gluten-free, high-protein and organic options.

“What we’re seeing is with the access to the Internet, consumers are actually now becoming their own dietitians,” Mr. Westcott said. “They experience certain feelings of wellbeing, they research them, and then they adapt their diet... It’s a really fascinating era and a very dynamic era, and we’re starting to understand better how those trends are connecting through the lens of wellbeing.”

But in today’s busy world, consumers still want the convenience of packaged foods. Nestle sees this as an advantage for its frozen foods business.

“We believe convenience is going to be a very important hallmark for how the American consumer eats and lives, and freezing is the way consumers deal with their own leftovers and foods in order to keep them fresh,” Mr. Carmichael said. “So, we don’t believe there’s a problem with the technology; we do believe there probably wasn’t the innovation or quality investment historically across the category necessary to keep it modern and fresh.

Nestle recently refreshed its Lean Cuisine and Stouffer's line.

“So whether it be some of the things you’re seeing in the Stouffer’s and Lean Cuisine businesses and the refreshing of the recipes and the packaging and positioning, we’re doing the same on some of the pizzas and snacking businesses in order to bring that back.”

In recent quarters, Nestle executives have been candid during earnings calls about the company’s struggling frozen food business, but Mr. Westcott said challenges in the category have become an important “life lesson.”

“It’s helped us to understand more clearly what consumers are wanting,” he said. “When we’re looking at making a dough, previously we would have used things like emulsifiers and other things to optimize the dough’s quality. Now we can’t do that because consumers are saying, ‘We want it clean.’ So we have to use a lot more science and technology to understand what we’re making…

“And I think that’s where a lot of the confidence comes from… if we can connect our products with those drivers, and we really need a center like this to be able to do it… then we’re really going to be able to win in this category.”

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